Crypto lending platform Yamp Finance introduces YAMP, a token eliminating temporary loss risk

By: Daniela Kirova
Daniela Kirova
Daniela was born in Bulgaria, grew up in Chicago, and then moved to Michigan to attend the University of… read more.
on Jul 20, 2021
  • $7 billion is locked in LP tokens on AMM exchanges
  • These tokens can be borrowed for performing arbitrage, managing taxes, earning yields
  • Yamp allows leverage of at least 10x on borrowed positions, reducing risk to the borrower’s collateral

Community-focused, multi-chain launchpad Starter announced the launch of the token $YAMP in partnership with automated crypto lending platform Yamp Finance. The platform is the first of its kind to use LP tokens as automated lending collateral on four different blockchains. The token will reduce the risk of temporary loss inflicted by trading pair volatility and allow anyone to list a new lending pair for tokens on Serum, UniSwap, PancakeSwap, and QuickSwap.

$7B locked in LP tokens on AMM exchanges

Liquidity providers are required by AMM exchanges to hold locked LP tokens, due to which about $7 billion is locked in LP tokens on such exchanges at the moment. Liquidity providers tend to miss out on ways to use the money, like borrowing tokens to perform arbitrage, manage taxes, earn yields, and hedge positions. While leverage is practically unheard of in DeFi, it’s prominent on Binance and other centralized exchanges.

$YAMP mitigates risks of over-collateralization

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Currently, most platforms make leverage positions very risky by mandating borrowers to over-collateralize. There’s always the risk of the loan value becoming higher than the collateral value with any collateralized DeFi loan. The collateral is liquidated to repay the lender in this case. Yamp Finance eliminates default risk and allows leverage of at least 10x on borrowed positions, thereby reducing risk to the borrower’s collateral. Liquidity providers can use a token as collateral through their LP tokens backed by that same token. As the loan value is matched by the LP token value, a more reliable and safer liquidation threshold is created.  

A fixed-supply governance token

$YAMP has the additional advantage of being a governance token with fixed supply, which totals 70 million tokens. Users can collect four-fifths of the interest generated in the lending platform, which will make it possible for them to enjoy a passive income. Starter has successfully launched Cake Monster (MONSTA), WISE Token (WISE), Wall Street Bets (WSB), Bakery Tools (TBAKE), FOMO Labs (FOMO), and other blockchain projects. Quite a number have sold out in the first minutes and even seconds.

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